The present invention relates to a system and a method for electronically processing transactional data and monitoring funds invested in one or more of annuity contracts or life insurance contracts such that the invested funds are protected by depositor's insurance, such as FDIC insurance.
Certain banking institutions, banks and savings and loans pay premiums such that money on deposit in those banking institutions is insured. For example, in the United States, the premiums are paid to an agency of the federal government (the Federal Deposit Insurance Corporation, or FDIC), and the institutions thus are federally insured. If the banking institution becomes insolvent for any reason, the FDIC pays the depositor for any losses up to an established insured limit. At present, deposits are insured up to $100,000.00. There is a regulation in the United States which provides that funds deposited by life insurance companies or a corporation solely to fund life insurance or annuity contracts will be insured up to the depositor's insurance limit ($100,000.00) per individual entitled to receive benefits under the contract. The persons entitled to receive benefits under an annuity contract or a life insurance are called herein contract "primary beneficiaries" whether those persons are classified as subscribers or customers (the individuals who invest in the contracts) or as other beneficiaries (other individuals).
An annuity contract is a contract that pays a primary beneficiary an amount at regular intervals or pays a primary beneficiary a lump sum at a predetermined time in the future. The annuity contract is funded or provided for by a subscriber. Essentially, the subscriber pays a certain amount of money to a company, the company invests that money, and the company at a certain time in the future or at regular intervals pays the primary beneficiary a prescribed amount as required under the annuity contract. Primary beneficiaries for annuity contracts are sometimes called "annuitants."
Similarly, a life insurance contract pays out a sum upon the death of a subscriber to primary beneficiaries.
If annuity contracts are structured as an irrevocable trust, the subscriber's principal and/or income is placed in a trust corpus. The total income of the trust corpus is distributed to all primary beneficiaries. Then as mortality reduces the number of primary beneficiaries, the trust income is distributed to fewer and fewer primary beneficiaries. When the last subscriber dies, the trust corpus is distributed to "secondary beneficiaries."